<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
FORT DEARBORN INCOME SECURITIES, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Payment of Filing Fee (Check the appropriate box):
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<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction
applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
FORT DEARBORN INCOME SECURITIES, INC.
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To The Shareholders of
Fort Dearborn Income Securities, Inc.:
The Annual Meeting of Shareholders of Fort Dearborn Income Securities, Inc.
(the "Company") will be held on Monday, December 11, 2000, at 2:00 P.M., Chicago
time, at Brinson Partners, Inc., 209 South LaSalle Street, ninth floor, Chicago,
Illinois 60604, for the following purposes and for the transaction of such other
business as may properly come before the meeting:
(1) electing five directors; and
(2) voting to ratify or reject the selection of independent certified public
accountants made by the Board of Directors for the year ending
September 30, 2001.
The subjects referred to above are discussed in detail in the Proxy
Statement attached to this notice. Each shareholder is invited to attend the
Annual Meeting of Shareholders in person. Shareholders of record at the close of
business on October 23, 2000, have the right to vote at the meeting. WE URGE YOU
TO FILL IN, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY IN ORDER THAT THE
MEETING CAN BE HELD AND A MAXIMUM NUMBER OF SHARES MAY BE VOTED.
JOSEPH A. ANDERSON
SECRETARY
Chicago, Illinois
November 13, 2000
<PAGE>
FORT DEARBORN INCOME SECURITIES, INC.
209 S. LASALLE ST., ELEVENTH FLOOR
CHICAGO, ILLINOIS 60604-1295
--------------
PROXY STATEMENT
INTRODUCTION
This statement, which is being mailed to shareholders on or about
November 13, 2000, is furnished in connection with the solicitation of proxies
by the Board of Directors of Fort Dearborn Income Securities, Inc. (the
"Company") for use at the Annual Meeting of Shareholders (the "Annual Meeting")
to be held at Brinson Partners, Inc., 209 South LaSalle Street, ninth floor,
Chicago, Illinois 60604, on Monday, December 11, 2000, at 2:00 P.M., Chicago
time. Proxies may be solicited by mail, telephone and personal interview. The
Company may also request brokers, custodians, nominees and fiduciaries to
forward proxy material to the beneficial owners of stock of record. Any proxy
given pursuant to such solicitation and received in time for the Annual Meeting
will be voted as specified in such proxy. The enclosed proxy is revocable at any
time. The proxy may be revoked in writing, by giving a later-dated proxy, or
orally at the Annual Meeting. Signing and mailing the proxy will not affect your
right to give a later proxy or to attend the meeting and vote your shares in
person. The cost of soliciting proxies will be paid by the Company.
On October 23, 2000, the date for determination of shareholders entitled to
receive notice of and to vote at the Annual Meeting, or any adjournments
thereof, there were issued and outstanding 8,775,665 shares of Capital Stock of
the Company, each entitled to one vote, constituting all of the Company's then-
outstanding securities. For purposes of determining the outcome of the vote on a
matter, an instruction to "abstain" from voting on a proposal will be treated as
shares present and entitled to vote and will have the same effect as a vote
against the proposal. "Broker non-votes" are not counted for the purpose of
determining the number of shares present on a voting matter and have no effect
on the outcome of the vote. Any adjournment of the meeting would require the
affirmative vote of a majority of those present in person or by proxy at the
session of the meeting to be adjourned. The proxy solicited hereby confers
authority to vote for any such adjournment; however, a proxy voted against or
abstained from voting on any proposal herein would not be voted in favor of an
adjournment to permit further solicitation of proxies.
1. ELECTION OF DIRECTORS
Five directors are to be elected at the Annual Meeting as the entire Board
of Directors to hold office until the next annual meeting or until their
successors shall have been elected and shall have qualified. If authority is
granted on the accompanying proxy to vote in the election of directors, it is
the intention of the persons named in the proxy to vote at the Annual Meeting
for the election of the nominees named below. If any of the nominees are
unavailable to serve as directors, an event which the Board of Directors does
not now expect, the persons named in the proxy will vote for such other persons
as they, in their discretion, may choose. The affirmative vote of the holders of
a majority of the shares represented at the Annual Meeting is required for the
election of a director. All of the nominees, except Adela Cepeda, are presently
directors of the Company and all have consented to serve if elected.
1
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<CAPTION>
SHARES
BENEFICIALLY
OWNED
WHEN DIRECTLY OR
FIRST INDIRECTLY
NAMES AND AGES PRINCIPAL OCCUPATIONS BECAME SEPTEMBER 30,
OF NOMINEES AND OTHER DIRECTORSHIPS DIRECTOR 2000
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<S> <C> <C> <C>
Richard M. Burridge, 71.............. Vice President, Investments, Paine 1972 9,531
Webber. Former Chairman, The Burridge
Group, (1996-2000); Director of
Lincoln National Income Fund and
Lincoln National Convertible
Securities Fund, Consultant to the
Investment Committee; Cincinatti
Financial Corp.; Vice Chairman,
Alliance Capital Management Corp.
prior to March, 1986.(1)
Adela Cepeda, 42..................... Founder and President of A.C. Advisory, -- 0
Inc.; Director of Lincoln National
Income Fund, Inc. and Lincoln National
Convertible Securities Fund. Former
Managing Director and co-founder of
Abacus Financial Group, Inc.,
(1991-1995); Vice President, Smith
Barney, Harris Upham & Co. Inc.,
(1980-1991).
C. Roderick O'Neil, CFA, 69.......... Chairman, O'Neil Associates (formerly 1992 3,153
Greenspan O'Neil Associates), an
investment and financial consulting
firm; Director, Beckman Coulter, Inc.
(Since January, 1994) Director, Ambac
Financial Group, Inc. and Ambac
Assurance Corporation (Since 1991) and
Cadre Institutional Investors Trust
(Since 1995); Trustee, Memorial Drive
Trust (Since 1974).
Frank K. Reilly, CFA, 64............. Bernard J. Hank Professor of Business 1993 3,406
Administration, University of Notre
Dame (since 1981); Chairman, The
Brinson Funds (since 1992); Chairman,
The Brinson Relationship Fund (since
1995); Director, Discover Bank (since
1993); Director, Morgan Stanley Dean
Witter Trust, FSB (since 1996);
Director, NIBCO (since 1993);
Director, Battery Park High Yield Fund
(since 1996); Board of Governors,
Association for Investment Management
and Research (1993-2000) Chairman,
1998-1999; Board of Trustees,
Institute of Chartered Financial
Analysts (1993-2000) Chairman,
1996-1997.
</TABLE>
2
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<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED
WHEN DIRECTLY OR
FIRST INDIRECTLY
NAMES AND AGES PRINCIPAL OCCUPATIONS BECAME SEPTEMBER 30,
OF NOMINEES AND OTHER DIRECTORSHIPS DIRECTOR 2000
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<S> <C> <C> <C>
Edward M. Roob, 66................... Senior Vice President, Daiwa Securities 1993 7,000
America, Inc. (1986-1993); Senior Vice
President, First National Bank of
Chicago (1975-1985); Director, The
Brinson Funds; Director, The Brinson
Relationship Funds; Trustee, Brinson
Trust Company; Member, Board of
Governors Chicago Stock Exchange,
(1988-1991); Member U.S. Treasury and
Federal Agency Advisory Committee,
(1972-1985). Member, Committee for
Specialist Assignment and Evaluation,
Chicago Stock Exchange, (1993-1999).
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(1) Deemed to be an "interested person" of the Company because he is an
employee of a registered broker-dealer.
The Board of Directors has an Audit Committee comprised of all of the
directors. The Board of Directors does not have a nominating or compensation
committee.
During the fiscal year ended September 30, 2000, five meetings of the Board
of Directors and one meeting of the Audit Committee were held. All directors,
except Mr. Peterson, attended at least 75% of the total number of such meetings.
Among other things, the Audit Committee makes recommendations concerning the
retention of the Company's independent auditors, their fees and duties,
including any non-audit related services performed by them; confers with such
auditors; reviews the Company's financial reporting activities; and confers with
and makes appropriate recommendations to personnel of the Company's investment
advisor who perform services of a financial nature for the Company.
The Company pays each of its directors (except Mr. Burridge) at the rate of
$9,000 annually to serve as directors and $750 for each Board of Directors
meeting attended. The Company pays Mr. Burridge at the rate of $13,000 annually
to serve as Chairman of the Board of Directors and $750 for each Board of
Directors meeting attended.
The following table sets forth as to each Director the compensation paid to
him in the fiscal year ended September 30, 2000 for service on the Board of the
Company and, in the case of Messrs. Reilly and Roob, on the boards of three
other investment companies for which the Advisor performed investment advisory
services.
3
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COMPENSATION TABLE
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<CAPTION>
PENSION OR
RETIREMENT
BENEFITS
ACCRUED AS
AGGREGATE PART OF ESTIMATED TOTAL COMPENSATION
COMPENSATION COMPANY ANNUAL BENEFITS FROM COMPANY AND
NAME OF DIRECTOR FROM COMPANY EXPENSES UPON RETIREMENT FUND COMPLEX
---------------- ------------ ----------- --------------- ------------------
<S> <C> <C> <C> <C>
Richard M. Burridge................ $16,750 0 0 $16,750
C. Roderick O'Neil................. $12,750 0 0 $12,750
Richard S. Peterson................ $ 8,250 0 0 $ 8,250
Frank K. Reilly.................... $12,000 0 0 $59,400
Edward M. Roob..................... $12,750 0 0 $60,150
</TABLE>
2. SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected KPMG LLP as auditors of the Company for
the fiscal year ending September 30, 2001. To the best knowledge of the Board of
Directors, the firm of KPMG LLP has no direct or material indirect financial
interest in the Company. Under the Investment Company Act of 1940, such
selection must be submitted to the shareholders for ratification or rejection at
the Annual Meeting. The Board of Directors recommends that such selection be
ratified by the shareholders of the Company. The affirmative vote of the holders
of a majority of the shares represented at the Annual Meeting is required for
ratification. Representatives of KPMG LLP will attend the Annual Meeting, have
an opportunity to make a statement and be available to respond to appropriate
questions from shareholders. KPMG LLP has been the independent auditors for the
Company since its organization.
INVESTMENT ADVISOR
Brinson Partners, Inc. ("Advisor"), 209 South LaSalle St., Chicago, Illinois
60604-1295, is the investment advisor to the Company. The Advisor is a
wholly-owned subsidiary of UBS (USA) Inc., 209 South LaSalle St., Chicago,
Illinois 60604-1295. UBS AG (Zurich, Switzerland) owns 100% of the common stock
of UBS (USA) Inc.
OFFICERS
The Company does not pay direct compensation to officers for their services
to the Company. The Company's officers are as follows:
Jeffrey J. Diermeier, CFA, B.B.A., M.B.A. (age 48), serves as the
President of the Company. Investment Committee member, UBS Brinson, Inc.
(1998-Present); Director, Chief Investment Officer and Managing Director and
Investment Committee member, Brinson Partners, Inc.
(2000-Present); Managing Director, First Chicago Investment Advisors, N.A.
(1975-1989).
Gregory P. Smith, CFA (age 40), who serves as Portfolio Manager of the
Company (since 1988), is a Portfolio Manager, Fixed Income Group, Brinson
Partners, Inc. (since 1989), was a Portfolio Manager, Fixed Income Division,
First Chicago Investment Advisors (1987-1989), and was an Assistant Vice
President of The First National Bank of Chicago (1988-1989).
Joseph A. Anderson (age 38), who serves as Secretary-Treasurer of the
Company is a Director of Brinson Partners, Inc. (since 1993), was the
Assistant Secretary and Assistant Treasurer of Fort Dearborn (1992-1995) and
is currently the Vice President of Brinson Trust Company (since 1995).
Robert M. Fascia (age 27) serves as Assistant Secretary and Assistant
Treasurer of the Company and is an employee of Brinson Partners, Inc.,
(since 1999). He was previously employed by Stein Roe & Farnham.
4
<PAGE>
PRINCIPAL SHAREHOLDERS
Generally, under the Securities and Exchange Commission rules, a person is
deemed to be the beneficial owner of a security with respect to which such
person, through any contract, arrangement, understanding, relationship or
otherwise, has or shares voting power (which includes power to vote, or direct
the voting of, such security) or investment power (which includes power to
dispose of, or direct the disposition of, such security).
On September 30, 2000, the directors and officers of the Company as a group
owned or were deemed to own beneficially, directly or indirectly, a total of
25,090 shares of Capital Stock of the Company (less than 1% of the outstanding
shares).
SHAREHOLDER PROPOSALS
Any shareholder proposal to be presented for action at the Company's 2001
annual meeting of shareholders must be received at the Company's office in
Chicago, Illinois not less than 120 days in advance of that date in 2001 which
corresponds to the date of the Proxy Statement in order to be considered for
inclusion in the proxy materials for that meeting.
OTHER MATTERS
Shareholders are urged to review the Company's Annual Report which
accompanies this Proxy Statement.
The Board of Directors does not know of any matters to be presented at the
Annual Meeting other than those mentioned in this Proxy Statement. If any other
business should come before the meeting, the persons named in the proxy will
vote thereon in accordance with their best judgment.
Please complete and sign the enclosed proxy and return it in the envelope
provided so that the meeting may be held and action taken on the matters
described herein with the greatest possible participating shares.
JOSEPH A. ANDERSON
SECRETARY/TREASURER
5
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<S><C>
Please mark your
/X/ votes as in this | 6210
example ---
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR ELECTION OF DIRECTORS AND FOR PROPOSAL 2.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF DIRECTORS AND FOR PROPOSAL 2.
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FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of 2. Ratification of KPMG 3. In their discretion, the proxies are authorized
Directors. / / / / LLP as independent / / / / / / to vote upon such other matters as may properly
(see reverse) accountants. come before the Meeting or any adjournment
thereof.
FOR, except vote withhold from the following nominee(s):
CHANGE OF ADDRESS/
COMMENTS ON REVERSE SIDE. / /
________________________________________________________
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Please date and sign exactly as name appears
hereon. Joint owners should each sign. When
signing as attorney, executor, administrator,
trustee or guardian, please give full title as
such.
______________________________________________
__________________________________________2000
SIGNATURE(S) DATE
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FORT DEARBORN INCOME SECURITIES, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
P ANNUAL MEETING OF SHAREHOLDERS, DECEMBER 11, 2000
R The undersigned, having received the Notice of Annual Meeting and Proxy Statement dated November 13, 2000 appoints M. Finley
Maxson and Robert M. Fascia and each or any of them as proxies, with full power of substitution and revocation, to represent
O the undersigned and to vote all shares (including those owned beneficially by the undersigned through the Automatic Dividend
Investment Plan) which the undersigned is entitled to vote at the Annual Meeting of Shareholders of Fort Dearborn Income
X Securities, Inc. to be held on December 11, 2000, 2:00 P.M., at Brinson Partners, Inc. 209 South LaSalle St., Ninth Floor,
Chicago, Illinois, and any adjournments thereof.
Y
Election of Directors, Nominees: COMMENTS: (change of address)
R.M. Burridge, A. Cepeda, C.R. O'Neil, __________________________________________________
F.K. Reilly, E.M. Roob
__________________________________________________
__________________________________________________
__________________________________________________
(If you have written in the above space, please mark
the corresponding box on the reverse side of this
card.)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICE BY MARKING THE APPROPRIATE BOXES ON THE REVERSE SIDE. IF YOU
DO NOT MARK ANY BOXES, YOUR PROXY WILL BE VOTED IN ACCORDANCE WITH THE THE BOARD OF DIRECTORS' RECOMMENDA- -------------------
TIONS. THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD. | SEE REVERSE |
| SIDE |
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